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Issues Involved:
1. Quashing of the First Information Report (FIR) u/s 482 of the Code of Criminal Procedure, 1973. 2. Allegations of offences under sections 403, 406, 415, 418, 420, and 424 of the Indian Penal Code. 3. Determination of whether the company is a "vanishing company." 4. Examination of the basic ingredients of the alleged offences. 5. Delay in filing the FIR. 6. Role and liability of individual directors. Summary: Quashing of the FIR: By these applications u/s 482 of the Code of Criminal Procedure, 1973, the applicants sought quashing of the FIR registered at Navrangpura Police Station I-C.R. No. 846 of 2003. The applicants, who are directors of the company, contended that the FIR is based on the erroneous classification of their company as a "vanishing company" and lacks substantive allegations. Allegations of Offences: The FIR alleged that the directors/promoters/signatories to the prospectus committed offences under sections 403, 406, 415, 418, 420, and 424 of the Indian Penal Code by inducing the public to invest funds and misappropriating those funds. The applicants argued that the FIR did not satisfy the basic ingredients of these offences, particularly the intention to cheat at the time of the transaction. Vanishing Company: The applicants pointed out that their company, M/s. Komeon Communications Ltd., was wrongly listed as a vanishing company. They provided evidence that the company was always at its registered address and had communicated with SEBI and the Registrar of Companies. The Task Force Committee had removed the company from the vanishing companies list, effective from 8.3.2010. Examination of Alleged Offences: The court examined the allegations in the FIR and found them vague and general. There were no specific allegations of false statements in the prospectus or how the funds were misappropriated. The court noted that mere breach of contract does not constitute an offence of cheating unless fraudulent or dishonest intention is shown at the inception. Delay in Filing the FIR: The applicants argued that the FIR was barred by delay, as the prospectus was issued on 17th July 1996, and the FIR was lodged on 24th September 2003, more than seven years later. The court acknowledged this delay as a significant factor. Role and Liability of Individual Directors: One applicant argued that he had resigned as a director on 26th December 1996 and had no role in the alleged offences. The court noted the lack of specific allegations against him in the FIR. Conclusion: The court found that the allegations in the FIR did not constitute the offences alleged under the Indian Penal Code. The FIR was based on the company's erroneous classification as a vanishing company without due inquiry. The court held that continuing the proceedings would amount to an abuse of process of law and quashed the FIR registered vide Navrangpura Police Station I-C.R. No. 846 of 2003. Rule was made absolute in both applications.
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